NBNCo Strategic Review Analysis
Criticisms of the Mixed Technology Model (MTM) TODO: Expand on this graph of issues, probably best to keep to a 'bullet point' structure for now, and flesh out into a full form document when the structure is satisfactory. Citations should be provided where possible. *Cost of two stage deployment **Some confusion about exactly what 'two stage deployment' means following last Senate hearing *Useful lifespan of FTTN infrastructure **Future applications not served by FTTN due to bandwidth / QOS constraints ***Applications requiring significant upload bandwidth will suffer first - Telepresence, Cloud Computing, Content Creation, Business Apps, Social Sharing ****These applications likely have more of an impact on productivity (aka GDP) than downstream bandwidth limited applications ***High bandwidth entertainment applications such as 4k Video, Console Game Downloads, etc will stress downstream FTTN bandwidth from day 1 **ABS / OECD / Cisco projections of future data use - when does FTTN run out of steam? ***Australian Bureau of Statistics (ABS) recorded growth of fixed line broadband data transfer of 61% from June 2012 - June 2013 (389PB to 629PB). source ***Cisco forcasts Compound Annual Growth Rate (CAGR) of 27% for end-user (consumer) internet traffic in the Asia Pacific region (2012-2017). source *Limitations on ubiquity of service with a mixed technology model *Largely uncharacterized real-world performance of (vectored) VDSL2 in Australia **Copper gauge **Bridge taps **Weather related service faults (primarily water ingress) **Persistent chronic service faults (poor joint conductivity due to corrosion, poor maintenance, etc) **Only one copper pair can be assumed to be available - many vendors quote speeds over 2 pairs *Impact of internal household telephone wiring quality on VDSL service, and burden of responsibility of remediation when this is necessary *Customer Premise Equipment (CPE) VDSL modems are assumed to be BYO, vs supplied by NBNCo in FTTH rollout **Negative impact on network management and diagnostics from NBNCo end **Increased complexity and cost of technical support provided by Retail Service Provider (RSP) **Shift of multiple Billions cost off the project ledger and onto end users **Loss of purchasing power vs buying 8+ Million identical FTTH CPE modems **Question weather a nationwide transition to VOIP is logistically feasible using BYO equipment *Will POTS voice circuits continue to be supplied from the node over the copper pair in FTTN model? **If not, how will this impact Universal Service Obligation (USO) re access to voice telephony? uso documents **How will this impact upon access to emergency serivces such as '000'? **If POTS is supplied over copper, therefore enabling legacy POTS devices, will this impact the performance of VDSL 'vectoring' technology? **POTS support (via fiber) and ergo USO, access to emergency services was built in to the FTTH model *Special Services (existing copper services that cannot be easily migrated to the NBN, and may reduce the speed and service distance possible for vectored VDSL2). See (3.2.5) *Unknown number of nodes required to achieve performance targets *Unknown quality of the existing copper network *Inability to guarantee minimum service speeds *Wildly inaccurate costings ('fully costed, bulletproof' $29B, now $41B with a smaller footprint) *Terms of reference, have these been 'reverse engineered' into the report to maximise MTM outcomes? *Cost of copper infrastructure *Maintenance of copper infrastructure :: (3.2.9) Ongoing costs, including maintenance: "FTTN variable operating expenses are estimated at $35-55 for the access network per brownfields Premises Passed per year, including $10–20 for electricity and $25-35 for corrective maintenance." :: Even taking the highest figure of all, this averages out as $9 per month, which is the current ULL (leased copper line) rate. However when multiplied over 12 million premises Australia wide, it's $420m which isn't consistant with known Telstra maintenance figures of approx $750m per year. Can only conclude the reports figures are wrong, as no additional money for building the network nor does it meet to costs of current maintenance. *Cost of HFC infrastructure *Conflicts of interest re purchase of Telstra assets *Conflicts of interest regarding Foxtel *Equipment replacement cost after 5 years *Deployment delayed until 2019, leaving only 3 year gap between full FTTP and MTM model Criticisms of FTTH Costing Model TODO Expand on following issues. Document is heavily redacted, very difficult to assess costing model. *Timeline has slipped, this obviously increases opex costs and delays ROI **Project start delay due to protracted contract negotiations (Telstra pits/ducts, ACCC, etc) **Contractor disputes over pay **Telstra remediation roadblock due to asbestos (would also impact FTTN rollout) *Savings and learned efficiencies not taken into account *Strategic review reports 'no material issues' with NBNCo projection of $37.4B